Please Kill The Phrase NZ Inc (Why A Country Is Not A Corporate)

The phrase NZ Inc is so nauseating. Please stop using it. New Zealand is a collection of individuals, firms, government agencies, councils, charities, families, iwi and a whole lot of other fluid groups that change their composition and goals frequently.

A country is not a corporate. New Zealand is not some sort of business enterprise that can be called “NZ Inc”. It’s a really lame phrase anyway – the phrase seems to tilt towards protecting the interests of exporters as opposed to the interests of everyone else who benefits from cheaper imports.

Any attempt to centralise NZ business expansion into particular markets will end up being a waste of time and money. The internet is the great enabler of decentralised business development – a lot of firms simply aren’t producing anything valuable and trying to resuscitate a rubbish business with a “China Growth Strategy” is sadistic and highlights the deficient investment in R&D over the past few decades.

Profitable firms don’t need NZ Inc and handholding from MFAT officials in order to grow their business overseas. They’ve got people on the ground, hooked into local business networks and figuring it out as they go. In some countries, due to NZ jumping on the “make it hard to do business in the 3rd world” bandwagon, you probably don’t want squeaky clean green NZ Inc’s brand associated with the realities of doing business in interior regions of China.

The rise of MBIE, the fall of MFAT, the sidelining of Treasury and the fact that even some of our biggest trading partners only know about New Zealand from Hollywood is proof that all of the NZ Inc branding and spending on cocktail parties and seminars is hardly going to achieve any impact.

The same goes for altering our policy choices in order to make NZ Inc a better place to do business. Anyone who complains about doing business in New Zealand really is having a moan. They’ve clearly never known anyone doing business on a large scale offshore and the enormous hurdles that have to be jumped before even getting plans drawn up for a factory.

At least here in little old New Zealand, we can point out really stupid obstacles to growth and recovery, like not letting people put flats on their property in Christchurch and trying to centrally plan our cities for the next 20 years when every single forecast and growth plan before the likes of the Unitary Plan was supposed to be “THE BIG ONE” that would negate the need for any other “SMART GROWTH NZ INC” strategies.

All of the NZ Inc policy optimisation and strategies are for nothing if entrepreneurs don’t bother turning up. Many are sick and tired of how New Zealand culture equates failure with criminality and how NIMBY attitudes make it impossible to do really simple things – like build flats in Christchurch on big sections to alleviate the housing shortage.

Busting this mini-rant back to some Hayekian truthiness – we know that prices are the best form of coordination. They contain a hell of a lot of information that is specialised and will only be revealed in market transactions when needed. Take Auckland house prices – the price signal is SCREAMING out that more houses need to be built, but the entire council and government approach is to shift incentives and make it hard for people wanting to respond to that price signal to actually do that in a timely manner.

There is no demand for what NZ Inc spruikers are trying to offer the world. The trend for margins in food products is down, middle class Chinese won’t pay a premium for NZ dairy products once they’ve sorted out their internal production quality issues. Clean and green is a myth – just look at rogue dairy farmers and people who think a 2 hour commute is a good use of their time.

At the apex of the “NZ Inc” spin is a really interesting insight into the delusions of grandeur that many New Zealand politicians, officials and businesspeople have. They think we matter, they think we are relevant and they think we can change the way the world does business. It’s so hopelessly naive I’m actually not surprised that John Key aired a while back the idea of New Zealand going for a UN Security Council seat.

We are collectively deluded if we think we can brand ourselves in such a way that it papers over the enormous deficiencies in our labour force, capital stock, housing stock, project approval processes and attitude to business. There are a lot of policy problems that need fixing here before trying to sell a mythical concept to the world.